In today’s ever-changing real estate market, the debate about the benefits of renting vs buying a home continues. Which option is better? As with most things, the answer is that it depends on your situation. We’re reviewing the benefits and costs of renting vs buying to help you make an informed decision for your future.
Pros and Cons of Buying vs. Renting
You may have heard that renting is “throwing away money” because you aren’t building equity. On the other hand, you also aren’t incurring the many expenses associated with homeownership. The truth is that both options have pros and cons, and ultimately, it’s up to you to decide what best fits your lifestyle and your financial reality.
Pros of renting:
- Your landlord covers the cost of maintaining and repairing your unit, as well as property taxes and insurance.
- Utilities may be included in your rent.
- No long-term commitment.
Cons of renting:
- You can’t build equity.
- Monthly rent may be higher than a monthly mortgage payment.
- You’re limited in changes you can make to your unit, and any improvements ultimately benefit your landlord.
- Risk of moving
Pros of buying:
- Gaining equity can help you build wealth in the long-term.
- You can remodel and update your home as you see fit.
- A monthly mortgage payment may be less than a monthly rental payment (but don’t forget the other costs associated with homeownership).
Cons of buying:
- You are responsible for all costs, including property taxes, insurance, maintenance, and more.
- Purchasing a home is a large upfront cost that far outweighs the upfront cost of renting.
- Ownership is a major commitment in terms of time, money, and labour.
Key Differences Between Buying and Renting
Rent vs Mortgage
Rent is a payment to the landlord for use of their property and can change periodically. In contrast, a mortgage payment is a combination of interest and principal on your loan and is typically stable over the mortgage term. Unlike renters, homeowners build equity as they pay down their mortgages.
Homeowners pay property taxes and can deduct this from their income tax return. Renters don’t typically pay property taxes.
As a homeowner, you’re responsible for maintenance and repairs. Renters aren’t responsible for these costs; the landlord is legally required to maintain their units.
Renting requires significantly less commitment than buying. If you like where you live, have a stable job, and plan to live there for at least 3-5 years, buying may be the right option for you. However, if you plan to move within the next 3 years or lack job security, renting may make more sense for you.
Achieve Your Dream of Homeownership with JAAG Properties
In the end, there are benefits to both renting and owning. Thankfully, our Rent to Home Solution offers you the best of both worlds, allowing you to rent your home from us while you save money to become a homeowner. Contact us today to learn more about how you can rent to own your home!